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1) Define MPC(marginal propensity to consume) and MPS(marginal propensity to save)
2) Define multiplier effects, based on Keynesian Fiscal policy.
3) When economy falls into a recession, what kind of fiscal policy is needed? Give a specific tool of fiscal policy.
4)Discuss the long run effects of “Crowding out” due to a short run expansionary fiscal Policy.
5) Treasure Hunt:
a) Go to www.cengage.com/sso (Links to an external site.)Links to an external site. web site. At Bookshelf of Arnold economics of 11th edition, click Economics Course Mate of Economics(11th ed) by Roger A Arnold . Then, click “select chapter” for Ch 11 and try Ch11: Fiscal policy to get access to ” Video Office hours ” left menu bar. Summarize the contents of “Video Office hours”. (3 points)
b) Summarize the contents of “Working with Diagrams” of Ch 8 , 9 , 10 and 11 at www.cengage.com/sso (Links to an external site.)Links to an external site.
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